S&P Hits Another RECORD High…

1. Genevieve’s Corner

S&P HITS ANOTHER RECORD HIGH…

…the 7th of the year!

Let’s recap the week:

- NEW RECORD HIGHS: META, MSFT and NVIDIA 

- Magnificent 7 have added a combined $3 TRILLION in market cap in 2024

-Meta added +$200 billion in market cap in a single day- the biggest one-day gain for any public company in history!

- Meta shares hit record high, announces $50B buyback & initiates a dividend

- Meta beats earnings EPS $5.33 vs $4.91 expected (+202% YoY)

- Amazon beats earnings EPS $1.00 vs $0.80 expected (+200% YoY)

- Google beats earnings EPS $1.64 vs $1.59 expected (+60% YoY)

- Apple beats earnings EPS $2.18 vs $2.11 expected (+16% YoY)

- Microsoft's market cap is now bigger than the entire value of Canada’s largest stock exchange (TSX)

- FED leaves interest rates unchanged

- Powell doesn’t think it’s likely that FED will cut rates in March

- Odds of FED cutting rates in March drop to a fresh low of 20%. In December, odds were at +90%

- The FED balance sheet is now at the lowest level since March 2021, down $1.3 trillion from its peak in April 2022. How much more QT is needed to unwind the massive QE from March 2020- April 2022? $3.5 trillion (according to Charlie Bilello)

- Former President Trump says he will fire FED Chair Jerome Powell if elected in 2024

- New York Community Bankcorp shares down -40% on  loss and dividend cut (they bought Signature Bank last year)

- Regional Banks are down -7% this week ($KRE), and many regional banks are down double-digits in the last 5 days

- US economy adds 353,000 jobs in January, above expectations of 187,000

- The U.S. December jobs report was revised with 333,000 jobs added rather than the 216,000 originally reported. Breaks the 10-month trend of downward revisions in the reported jobs number

- The U.S. Unemployment Rate has been below 4% for 24 months, the longest streak since the late 1960s

- Over 82,000 layoff announcements in January 2024 (second worst January since 2009). Meanwhile, the US reported that 353,000 jobs were created in January. Something isn't adding up here (The Kobeissi Letter)

- Mentions of job cuts in earnings calls hits Pandemic Peak

- PayPal to cut 9% of workforce

- Block to cut 10% of workforce

- Deutsche Bank to cut 3,500 jobs (4% of workforce)

- UPS to cut 12,000 jobs 

- Amazon terminates acquisition of iRobot & and the vacuum maker announces laying off 31% of the workforce

- Evergrande, China's largest real estate developer, must be liquidated

- Spot Bitcoin ETFs now hold +3.3% of the current BTC supply

- Google updates policy allowing Bitcoin & crypto trust products to be advertised

- FTX expects to pay all its customers in full

- Elon Musk's $55B Tesla pay package voided by a judge

-Tesla will hold a shareholder vote to transfer its state of incorporation to Texas (from Delaware)

- Oil prices in free fall, down nearly 10% in less than 5 days (even as OPEC agreed to maintain production cuts)

- Q4 GAAP EPS +16% higher than a year ago after +46% of S&P 500 companies have reported

- Peloton hits new record low, stock down 98% from record high

- Nancy Pelosi's portfolio has hit a new record high. She is up +83.45%. This year alone, her positions have made +$3MM in gains (according to Unusual Whales)

After big changes in my portfolio last week, which you can read HERE, this week was all about earnings!

Here’s my take on earnings for my positions:

1. Microsoft

• Beat of top and bottom line: earnings $2.93 vs. $2.76 expected and sales $62B vs. $61.1B expected ✅

• Sales were up +17.5% YoY, and earnings were up +26% YoY

• The quarter's highlight was Azure (cloud) growth, stronger than expected, up 30% YoY – with a nice chunk of this due to AI.

• The Productivity and Business Process unit (Office, LinkedIn, etc.), the other two segments are up 12% YoY, and More Personal Computing (Windows, Bing, Xbox) is up +18% YoY.

My Take: While acknowledging Microsoft's rich valuation, I appreciate the diversity in… Upgrade HERE to VIP to read my full GRIT Take! Get 50% off now through February 14th. 💝

2. Apple

• Apple beats earnings EPS $2.18 vs $2.11 expected (+16% YoY) ✅

• First sales growth in a year (+2% YoY)

• iPhone sales up +6%

• Record revenue in the Services division (Apple Music, Cloud Services, App Store, Licensing, Apple Pay, advertisement, etc.)

• The installed base of active devices is at +2.2B (up +20% YoY) – a record high across all products and geographies!

• Launched Vision Pro Headset this week ($100B has been spent on R&D on this product) – a lot of excitement but only a tiny likely contribution to revenue of 1%

• Problematic: China revenue is down 13% YoY, and iPad sales are down 25% YoY.

My Take: The recent quarter presented a decent performance for Apple, although the… Upgrade HERE to VIP to read my full GRIT Take! Get 50% off now through February 14th. 💝

3. Amazon

• Amazon beats earnings EPS $1.00 vs $0.80 expected (+200% YoY) ✅

• Q4 was a record-breaking Holiday shopping season

• Sales +14% YoY

• Upbeat Q1 guidance

• Strong Ad-revenue (+26% YoY) – launched ads on Prime

• AWS was in line (+13% YoY)

• Launched a new AI shopping assistant called Rufis

• The company sees potential for AI development to generate tens of billions of dollars for its cloud business

My Take: What a remarkable turnaround for Amazon! Through cost-cutting measures… Upgrade HERE to VIP to read my full GRIT Take! Get 50% off now through February 14th. 💝

Stay tuned for shifts next week!

Cheers,

Genevieve Roch-Decter

2. Matt Allen’s Corner

MOST IMPORTANT DIVIDEND DATES TO KNOW

Hi Everyone! Today, I’m highlighting one of our newest sections in GRIT VIP, Dividends! Below, I share part of my newest article, Most Important Dividend Dates To Know.

Investing in dividend-paying stocks can be a smart way to generate regular income from your investment portfolio. However, navigating the dividend landscape requires understanding key dates significantly impacting your dividend earnings. 💵

This resource is designed to demystify the world of dividend dates, providing investors with essential knowledge about the most important dates in the dividend calendar. 

📆 From the declaration to the payment date, we'll explore each milestone in detail, ensuring you can make informed decisions and maximize your dividend returns. Whether you're a seasoned investor or new to the stock market, understanding these pivotal dates is crucial in optimizing your dividend investment strategy.

The Declaration Date 

The declaration date, often considered the starting point in the dividend timeline, holds paramount importance for dividend investors. This is when a company's board of directors formally announces its next dividend payment. On the declaration date, the company reveals several key pieces of information crucial for investors: the amount of the dividend per share, the record date (which we will discuss later), and the payment date.

Understanding the declaration date is essential for several reasons. Firstly, it signals the company's financial health and stability. A consistent history of dividend declarations typically reflects a company's strong earnings and a commitment to returning value to shareholders. The declared dividend indicates the company’s current profitability and outlook. 📈

For investors, the declaration date serves as a trigger for several strategic decisions. It is a cue for potential investors to buy shares to receive the upcoming dividend. For existing shareholders, it allows them to reassess their investment, especially if the dividend amount differs significantly from expectations, either positively or negatively.

The Ex-Dividend Date

The ex-dividend date is a crucial milestone for dividend investors, marking when a stock starts trading without the value of its next dividend payment. To receive the declared dividend, an investor must purchase the stock before the ex-dividend date. If you buy the stock on or after this date, the dividend will go to the seller of the stock. 💰

For example, if Company XYZ declares a dividend with an ex-dividend date of June 10th, you must own the stock by the close of the market on June 9th to be eligible for the dividend. You will not receive the upcoming dividend if you purchase the stock on June 10th or later.

The stock price typically drops approximately equal to the dividend on the ex-dividend date, reflecting the dividend's payout. This price adjustment is essential for short-term traders but less for long-term investors who focus more on the cumulative returns from regular dividends over time.

Understanding the ex-dividend date is vital to ensure you can receive dividends and comprehend the associated price movements of your investments.

Upgrade to GRIT VIP to access this full post and all our other investing resources! For a limited time, get 50% off your first annual subscription to GRIT VIP. 🚀 The discount expires on February 14th!

Have a great weekend!

Cheers,

Matt Allen

3. Comin’ Up

EARNINGS AND ECONOMIC DATA

💰 Earnings:

Monday: McDonald’s Corporation

Tuesday: Eli Lilly, Toyota

Wednesday: Alibaba, Disney

Thursday: Philip Morris

Friday: Pepisco

📈 Major Economic Events:

Monday: N/A

Tuesday: Fed President’s Speak

Wednesday: U.S. trade deficit

Thursday: Initial jobless claims

Friday: CPI seasonal revisions

The author of this newsletter owns ETF’s (exchange traded funds) that may hold ownership interests in the companies discussed in this newsletter as of the published date of this newsletter.